Americans are Shopping, Retail Sales Up Sharply in July
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Americans shopped at a healthy pace in July, buying more cars, clothes and appliances, evidence that confident consumers are helping drive strong economic growth.
The US Commerce Department says retail sales rose at a 0.5% annual rate in July, after a 0.2% increase the prior month. June’s increase, however, was revised lower from 0.5%.
Consumers are feeling upbeat and are in overall solid financial shape. The unemployment rate is near an 18-year low. And economic growth, along with hiring, has accelerated.
On average, Americans are saving more, which may encourage future spending.
Sales last month rose at auto dealers and grocery stores, and rose at clothing shops. Americans boosted their spending at restaurants and bars 1.3% in July from June. Gas station sales increased 0.8%.
US industrial production finished higher in July, boosted by higher manufacturing output in a positive sign for economic growth.
The Fed said Wednesday industrial production rose 0.1% last month after an upwardly revised 1.0% increase in June.
Economists polled by Reuters had forecast industrial production rising 0.3% last month after a previously reported 0.6% increase in June.
Manufacturing output rose 0.3% in July, in line with analyst forecasts. Motor vehicle production rose 0.9%, while output of machinery expanded 0.6% and computers and electronics grew 1.3%.
The data appeared to show US factories weathering the early days of an escalation of a US trade disputewith China. The Trump Administration raised tariffs on a range of Chinese imports in July, triggering retaliatory tariffs from Beijing on US exports.
Manufacturing, which accounts for about 12% of the economy, is still being supported by a strong domestic and global economy. But many economists see a risk that escalating trade tensions could undercut business investment.
Mining production fell 0.3% in July, with Oil & Gas well drilling down 4.3%. Utilities output dropped 0.5% in July.
With overall industrial production posting only a slight gainer.
Capacity utilization, a measure of how fully firms are using their resources, held steady last month at 78.1%. It is 1.7% below its 1972-to-2017 average.